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Author Question: Explain the law of diminishing marginal utility. How does it relate to the shape of the demand ... (Read 66 times)

mpobi80

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on: Jun 29, 2018
Explain the law of diminishing marginal utility. How does it relate to the shape of the demand curve?
 
  What will be an ideal response?

Question 2

What is price discrimination? Give examples of price discrimination.
 
  What will be an ideal response?


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smrerig

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The law of diminishing marginal utility states that each additional unit of a good consumed provides less and less additional satisfaction. Therefore, the amount that a person will be willing to pay for a product will fall as more of the product is consumed. This is one reason why demand curves slope downward.

Answer to Question 2

Price discrimination is the practice of selling different units of a good or service for different prices. For example, airlines' customers pay different prices for the same trip, pizzerias charge a lower price for the second pizza bought, or Microsoft charges a lower than regular price when it sells its Office software to students.


mpobi80

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Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it

covalentbond

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Reply 3 on: Yesterday
Excellent

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